Abstraction in economics: incorporating the time dimension
States that the homo economicus abstraction remains dominant in economics, despite a range of criticisms of its use over the years. Many institutionalists, post-Keynesians, neo-Austrians and social economists have insisted that economic analysis must be conducted in an explicit historical context, where the difficulties which economic decision-makers face, because of time irreversibility, structural change and fundamental uncertainty, are taken into account, as well as non-economic influences on economic behaviour. Understandably, there has been a reluctance to construct a competing abstraction with formal properties which are comparable to those of the homo economicus construct. It is argued in this paper that the development of an alternative behavioural abstraction constitutes an important goal, both in terms of clarifying the limitations of homo economicus and providing an analytical basis upon which investigations of economic behaviour in historical time can be built.
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